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HR and Payroll departments KNOW who is contributing and who is not.
It’s also pretty universal that those who are not contributing probably don’t know where there money is going.
It’s also a possibility that those who do not shore up their retirement will end up on assistance of some kind.
It’s a hard talk to have - but more power to him for having it.
I went from making $50 a paycheck contributions…. To $600 a paycheck contributions. And it hurt then. But it doesn’t now - in retirement.
No **** they know…that’s why it’s unprofessional to approach employees about their personal financial matters in a specifically scheduled work meeting and ask them unprofessional questions about if they’d quit with a 10% pay cut.
Confidential information is confidential, including talking to that person about it because you have no actual professional place in the discussion.
I remember when I started at my current position I started asking around to get some advice and guidance on how the tsp worked. I was surprised to find so many folks did not know or were not contributing to their accounts. At minimum work automatically puts in 1%, but that is in a bond fund.
So at first I did a target date fund. I was maxing out contributions within the first year. Then I changed into the individual funds into my own personal allocation mix. After a little while I showed some of my coworkers how I did the past year. That was enough to convince a few of them to contribute more and make some changes. One guy commented how quickly his account grew to 100k. He was bummed out it took him so long and he missed out on all that free money match, but I told him you can't change the past only the future.
I guess I'm not opposed to borrowing from the account to pay for certain goals. I know one guy borrowed 50k as a down payment on his his first home. With the appreciating costs, he's probably got a lot of equity now. I definitely think things like weddings or cars a no go though.
Years ago I had a number of direct reports that were not contributing to the 401K even with a dollar for dollar match. They claimed they couldn’t afford it. I sat them down individually and asked if we had a 10% pay cut would you quit this job, all said no. Then you can afford to participate in the 401K. That was thirty years ago and I run into them today and they thank me for pushing them as most are now retired with $500,000 and 600,000 in retirement savings.
Quote:
Originally Posted by mlb
It’s also pretty universal that those who are not contributing probably don’t know where there money is going.
It’s also a possibility that those who do not shore up their retirement will end up on assistance of some kind.
It’s a hard talk to have - but more power to him for having it.
Except it's not up to a person of authority in the workplace as to how/where (or if) an employee invests their money (nor is it their business) - particularly relative to his one-on-one interrogative 'one-size fits all' approach and his question re: 'Would you quit if you received a 10% reduction in pay'. What employee would say 'yes', even if true, by being put on the spot in a situation such as that while being asked about their finances?
It's questionable behavior, at best - particularly since he 'sat each one down' as opposed to providing general information (and preferably reliable sources other than himself), if specifically asked, so as to increase the employees' knowledge on the matter as opposed to 'pushing' or coercing. Matches and vesting schedules vary - as does each employee's contribution, often varying from 1% to 30% so he even force-fed a figure, so to speak, i.e. '10%'.
Employees choose how and where to invest their money, even if we don't know (or agree with) their plan.
Except it's not up to a person of authority in the workplace as to how/where (or if) an employee invests their money (nor is it their business) - particularly relative to his one-on-one interrogative 'one-size fits all' approach and his question re: 'Would you quit if you received a 10% reduction in pay'. What employee would say 'yes', even if true, by being put on the spot in a situation such as that while being asked about their finances?
It's questionable behavior, at best - particularly since he 'sat each one down' as opposed to providing general information (and preferably reliable sources other than himself), if specifically asked, so as to increase the employees' knowledge on the matter as opposed to 'pushing' or coercing. Matches and vesting schedules vary - as does each employee's contribution, often varying from 1% to 30% so he even force-fed a figure, so to speak, i.e. '10%'.
Employees choose how and where to invest their money, even if we don't know (or agree with) their plan.
No - it’s not up to the employer….. But look at it this way - when the 401K was originally started - there was a healthy match. The employer was local government
If the employee either refuses to contribute or doesn’t know how - isn’t it in the best interest of the employer to provide resources for the employee to either learn or figure out HOW to invest?
Most of my coworkers had absolutely no clue. And you couldn’t spoon feed them enough. They sat on their asses and raised their hands as if to “give up”… and let whatever was going to happen - happen.
Many of them are still at work - into their 70’s. And they’re deadwood. They’re there because they didn’t plan. It’s an at-will state. They are lucky to be employed.
If the employee either refuses to contribute or doesn’t know how - isn’t it in the best interest of the employer to provide resources for the employee to either learn or figure out HOW to invest?
The best interest of the employer is to treat their employees as adults capable of making their own financial decisions (without the need to push or coerce). They can 'refuse' to contribute and store their money under the mattress if they want, lol. It's not up to you. Providing additional information, if asked, so as to increase the employees' knowledge relative to the matter is quite different than 'sitting each one down individually' and interrogating/acting as though you're some sort of personal advisor/teacher (speaking to a child) who knows best relative to (all of) their personal finances (or even how long they plan on staying with the company, for that matter).
Again, employees choose how and where to invest their money, even if we don't know (or agree with) their plan.
Quote:
Originally Posted by mlb
And I have no empathy.
What's empathy have to do with anything, lol? Point being, as written, it's crossing a line.
Are you implying spending 20 minutes looking for a parking space, and waiting in two lines to pay $4 for a 69 cent cup of coffee (even though the boss provides free gourmet coffee at work) JUST so I can walk into the office with my 20 ounce "Symbol of Conformity" ISN'T a great investment?
No **** they know…that’s why it’s unprofessional to approach employees about their personal financial matters in a specifically scheduled work meeting and ask them unprofessional questions about if they’d quit with a 10% pay cut.
Confidential information is confidential, including talking to that person about it because you have no actual professional place in the discussion.
I’d agree with you. We receive overall participation rates/contributions rates meeting or exceeding the match as overall stats and I’ve discussed it in meetings as a high level topic, inviting anyone who wanted to discuss it more to approach me afterwards.
Well I have been chastised for pushing my reports to contribute to their 401K. Guilty as charged and I understand the confidentiality issue. I over stepped my position but I knew in the long run my “guidance” was in their best interest and it was. They didn’t have fathers, uncles or friends that were investment knowledgeable. These were my direct reports for whom I cared for. I wanted the best for them. The bottom line is they are thankful for my involvement.
Half of these posts are missing the point. It doesn’t matter how much it would be. The point is if you start as early as you can and are consistent, you’ll be surprised one day just how effective a worker TVM is.
I learned about 401ks in college where my Professor said to do it and that “even a monkey” could earn a consistent, over time, 15% return. I’m still not sure I would have started right out of college like I did had it not been for this wonderful man who went around to each new hire’s desk with the 401k paperwork and said “here, sign here, or else you’re just giving up free money.” All I can say now is I’m so happy I listened and I tell every young person I can to start now. And PS - when I started, I had debt, but rather than skip 401k until debt free I split the difference.
Too many people concentrate 100% on getting rid of all debt before investing - then they never get out of debt and that's their excuse to not save. So yes, sometimes you have to do both at the same time, as odd as that sounds.
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